Stocks set to increase slightly; Attentiveness towards U.S.-Russia discussions anticipated
Indian stock markets, including the Nifty 50 and Sensex, are experiencing turbulence due to ongoing geopolitical and trade tensions between the US and various global players, particularly Russia.
The Trump administration has imposed a 25% tariff on Indian imports, effective August 7, 2025, as part of its strategy to rectify the trade imbalance and compel India to open its markets further. Additionally, an additional 25% tariff on Indian crude oil imports from Russia is threatened starting August 27 if India does not cease these purchases.
India's External Affairs Minister S. Jaishankar has stated that India's crude oil trade with Russia is dictated by national and global interests, emphasizing these purchases will continue despite US tariffs. This stance indicates that India is unlikely to fully acquiesce to US demands soon, causing strained trade talks.
The imposition or threat of increased tariffs usually raises market uncertainty and risk perception among investors, which can lead to downward pressure on indices like the Nifty 50 and Sensex. Prolonged trade tensions may impact sectors heavily reliant on exports to or imports from the US or Russia, such as technology, chemicals, and energy stocks within these indices.
However, India's continued energy imports from Russia could keep oil-related sectors relatively stable or supported. If the US suspends or eases tariffs following progress in US-Russia talks, it may boost market sentiment positively, reducing risk premiums embedded in Indian equities.
In other market news, Jubilant Foodworks has beaten first-quarter profit estimates by a wide margin, thanks to lower-priced items on the menu and free deliveries bolstering demand. Meanwhile, United Spirits missed profit estimates, with higher marketing spends overshadowed by sustained demand for premium liquor.
Bharat Petroleum Corporation reported better-than-expected quarterly profit, helped by a dip in costs and improved fuel demand. The Sensex has risen 304 points, and the Nifty and Sensex are set to snap six consecutive weeks of losses. The Nifty and Sensex have risen about 1% so far this week, and the Sensex opened 213 points higher due to rate cut hopes.
The CPI (Consumer Price Index) has hit an 8-year low, which has caused the Nifty to end above 24,600. As of 8:00 a.m. IST, Gift Nifty futures are trading at 24,698. The Nifty 50 is expected to open higher than its previous close on Thursday.
Positive US-Russia talks could help ease US-India trade tensions, according to multiple analysts. The ongoing Russia-US talks and the US trade policies concerning India have created significant market volatility and uncertainty in India, likely causing cautious or negative movements in the Nifty 50 and Sensex in the short term. The markets remain sensitive to developments in these geopolitical and trade negotiations.
[1] "US to impose 25% tariff on Indian goods, threatens additional tariffs on crude oil imports." The Economic Times, 2025.
[2] "India to continue crude oil trade with Russia despite US tariffs: Jaishankar." The Hindu, 2025.
- The impending 25% tariff on Indian imports and threatened additional tariffs on crude oil imports from Russia by the US have sparked turbulence in Indian stock markets, particularly the Nifty 50 and Sensex.
- The Trump administration's strategy aims to rectify the trade imbalance and encourage India to open its markets further, with tariffs set to take effect on August 7, 2025, for imports, and August 27 for Russian crude oil imports.
- India's External Affairs Minister S. Jaishankar has stated that India's crude oil trade with Russia is driven by national and global interests, hinting that these purchases will continue despite US tariffs.
- The increased tariffs may exacerbate market uncertainty, leading to downward pressure on indices like the Nifty 50 and Sensex, potentially impacting export- or import-reliant sectors such as technology, chemicals, and energy stocks.
- However, India's continued energy imports from Russia could insulate oil-related sectors, and positive developments from US-Russia talks could boost market sentiment, reducing risk premiums embedded in Indian equities.
- In other market news, Jubilant Foodworks, United Spirits, and Bharat Petroleum Corporation have reported mixed quarterly earnings, with some companies overcoming challenges through creative strategies (like lower-priced items and free deliveries) to boost demand.
- The markets remain sensitive to developments in US-Russia talks and the US trade policies concerning India, with analysts anticipating that positive talks could help ease US-India trade tensions and lead to cautious optimism in the Nifty 50 and Sensex.
